Reopening the Case for a Balanced Budget Amendment
16 Pages Posted: 3 Dec 2014
Date Written: December 2, 2014
Congress has expressed interest, one way or the other, in a balanced-budget requirement for the past six decades. Yet despite numerous attempts, the legislative body has never passed a constitutional balanced-budget amendment. Most of the analysis of why we don’t yet have a constitutional amendment has been focused on the legal and political aspects of the issue. Less time and effort has been spent on economic analysis. This paper discusses how a balanced-budget requirement would change federal fiscal policy and thereby to some degree the federal government's role in the economy. The paper proposes an evaluation method for the impact that balanced-budget requirements have on the economy.
Keywords: Balanced Budget, Structural Deficit, Macroeconomics, Fiscal Policy
JEL Classification: E30, E32, E37, E60, E61, E62, E63, E65, H00, H50, H60, H62, H63
Suggested Citation: Suggested Citation